Fleet News

Dealer and manufacturer relationships under spotlight

THE Competition Commission has signalled that the relationship between manufacturers and their franchised dealers will lie at the heart of its New Cars Inquiry report. This will be published in December, but seven and a half pages of an eight-page remedies statement issued by the Commission last week concerned the selective and exclusive distribution system.

Better known as the block exemption, this governs the trading terms between manufacturers and dealers, a relationship where the Commission appears to believe manufacturers hold the upper hand. As a result, it has asked for industry views by October 29 on whether manufacturers should be able to impose minimum sales volumes on their dealers, dictate dealers' showroom standards, insist dealers offer service and maintenance facilities, restrict dealers to selling only one marque from each showroom, terminate a dealer's franchise without cause, and whether the block exemption should be renewed.

The Society of Motor Manufacturers and Traders has warned against a dilution of the block exemption, saying arguing that manufacturers' ability to set minimum standards for their dealer networks 'work to the benefit of consumers' who 'rightly demand confidence throughout the lifetime of a car purchase'. The SMMT also pointed out that the block exemption was a European Union policy, and not one that could be changed unilaterally by the UK.

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